(1) For the purposes of this Agreement, the term “permanent
establishment” means a fixed place of business through which
the business of the enterprise is wholly or partly carried on.
(2) The term “permanent establishment” includes especially:
a) a place of management;
b) a branch;
c) an office;
d) a factory;
e) a workshop;
f) a mine, an oil or gas well, a quarry or any other place relating
to the exploration for or exploitation of natural resources; and
g) an agricultural, pastoral or forestry property.
(3) A building site or construction or installation project
constitutes a permanent establishment only if it lasts more than
nine months.
(4) Notwithstanding the preceding provisions of this Article,
where an enterprise of a Contracting State:
a) carries on supervisory or consultancy activities in the other
State for more than nine months in connection with a building
site, or a construction or installation project, which is being
undertaken in that other State;
b) carries on activities (including the operation of substantial
equipment) in the other State in the exploration for or ex-
ploitation of natural resources situated in that other State for a
period or periods exceeding in the aggregate 90 days in any
12 month period; or
c) operates substantial equipment in the other State (including
as provided in subparagraph b)) for a period or periods ex-
ceeding in the aggregate 183 days in any 12 month period,
such activities shall be deemed to be carried on through a
permanent establishment that the enterprise has in that other
State, unless the activities are limited to those mentioned in para-
graph 6 and are, in relation to the enterprise, of a preparatory or
auxiliary character.
(5) Where an enterprise of a Contracting State carries on any
of the activities referred to in paragraphs 3 and 4 in the other
Contracting State, any connected activities carried on in that
other Contracting State during different periods of time, each
exceeding 30 days, by one or more enterprises closely related to
the first-mentioned enterprise will be added to the period of time
during which the first-mentioned enterprise has carried on the
activities for the purpose of determining whether the periods
referred to in paragraphs 3 and 4 have been exceeded.
(6) Notwithstanding the preceding provisions of this Article,
the term “permanent establishment” shall be deemed not to
include:
a) the use of facilities solely for the purpose of storage, display
or delivery of goods or merchandise belonging to the enter-
prise;
b) the maintenance of a stock of goods or merchandise belong-
ing to the enterprise solely for the purpose of storage, display
or delivery;
c) the maintenance of a stock of goods or merchandise belong-
ing to the enterprise solely for the purpose of processing by
another enterprise;
d) the maintenance of a fixed place of business solely for the
purpose of purchasing goods or merchandise, or for collect-
ing information, for the enterprise;
e) the maintenance of a fixed place of business solely for the
purpose of carrying on, for the enterprise, any other activity,
f) the maintenance of a fixed place of business solely for any
combination of activities mentioned in subparagraphs a) to e),
provided that such activity or, in the case of subparagraph f), the
overall activity of the fixed place of business, is of a preparatory
or auxiliary character.
(7) Paragraph 6 shall not apply to a fixed place of business
that is used or maintained by an enterprise if the same enterprise
or a closely related enterprise carries on business activities at the
same place or at another place in the same Contracting State
and
a) that place or other place constitutes a permanent establish-
ment for the enterprise or the closely related enterprise under
the provisions of this Article, or
b) the overall activity resulting from the combination of the
activities carried on by the two enterprises at the same place,
or by the same enterprise or closely related enterprises at the
two places, is not of a preparatory or auxiliary character,
provided that the business activities carried on by the two enter-
prises at the same place, or by the same enterprise or closely
related enterprises at the two places, constitute complementary
functions that are part of a cohesive business operation.
(8) Notwithstanding the provisions of paragraphs 1 and 2 but
subject to the provisions of paragraph 9, where a person is acting
in a Contracting State on behalf of an enterprise and
a) in doing so, habitually concludes contracts, or habitually
plays the principal role leading to the conclusion of contracts
that are routinely concluded without material modification by
the enterprise, and these contracts are
i)
in the name of the enterprise, or
ii) for the transfer of the ownership of, or for the granting of
the right to use, property owned by that enterprise or that
the enterprise has the right to use, or
iii) for the provision of services by that enterprise, or
b) manufactures or processes in a Contracting State for the
enterprise goods or merchandise belonging to the enterprise,
that enterprise shall be deemed to have a permanent establish-
ment in that State in respect of any activities which that person
undertakes for the enterprise, unless the activities of such person
are limited to those mentioned in paragraph 6 which, if exercised
through a fixed place of business, would not make this fixed
place of business a permanent establishment under the provi-
sions of that paragraph.
(9) Paragraph 8 shall not apply where the person acting in a
Contracting State on behalf of an enterprise of the other
Contracting State carries on business in the first-mentioned
State as an independent agent and acts for the enterprise in the
ordinary course of that business. Where, however, a person acts
exclusively or almost exclusively on behalf of one or more enter-
prises to which it is closely related, that person shall not be
considered to be an independent agent within the meaning of
this paragraph with respect to any such enterprise.
(10) For the purpose of this Article, a person is closely related
to an enterprise if, based on all the relevant facts and circum-
stances, one has control of the other or both are under the
control of the same persons or enterprises. In any case, a person
shall be considered to be closely related to an enterprise if one
possesses directly or indirectly more than 50 per cent of the
beneficial interests in the other (or, in the case of a company,
more than 50 per cent of the aggregate vote and value of the
company’s shares or of the beneficial equity interest in the com-
pany) or if another person possesses directly or indirectly more
than 50 per cent of the beneficial interest (or, in the case of a
company, more than 50 per cent of the aggregate vote and value
of the company’s shares or of the beneficial equity interest in the
company) in the person and the enterprise.
(11) The fact that a company which is a resident of a Contract-
ing State controls or is controlled by a company which is a resi-
dent of the other Contracting State, or which carries on business
in that other State (whether through a permanent establishment
or otherwise), shall not of itself make either company a perma-
nent establishment of the other.
(12) The principles set forth in the preceding paragraphs of
this Article shall be applied in determining for the purposes of
paragraph 7 of Article 11 and paragraph 5 of Article 12 whether
there is a permanent establishment outside both Contracting
States, and whether an enterprise, not being an enterprise of a
Contracting State, has a permanent establishment in a Contract-
ing State.